Most Counties Will Have Free ACA Plans for Low-Income Enrollees

A recent analysis by Avalere found that most counties in the United States will have free ACA plans for low-income residents.

The Trump Administration’s decision to end the cost-sharing reductions subsidies had the unintended effect of increasing the value of another form of subsidy granted through the ACA: the premium subsidy. Under the ACA, the federal government provides a subsidy relative to the cost of the second cheapest silver plan in a region. Without the CSRs the cost of silver plans increased to make up the cost discrepancy for insurers, which in turn increased the amount of the premium subsidies.

Due to the elimination of the CSRs, silver plans are expected to increase by an average of 34% across the country—while bronze and gold plans have only increased by 18% and 16%, respectively.

“This year, more than ever, it is important for consumers to shop around and compare their options across metal levels,” Chris Sloan, senior manager at Avalere, said in a press release. “The dramatically higher subsidies mean consumers could be getting much better deals for bronze and gold plans for 2018.” 

As a result, 98% of counties with exchanges operated by healthcare.gov will have a free bronze level plan for enrollees who are older than 50 and make less than $18,090 for an individual or $36,900 for a family of four. Additionally, 18% of counties will have free silver plans for these enrollees, and 10% of counties will have free gold level plans.

“The curious effect of the Administration’s elimination of the cost-sharing reduction payments is that many subsidized individuals may find that they pay less for premiums in 2018,” Caroline Pearson, senior vice president at Avalere, said.

The report noted that while bronze plans will come without a monthly premium for these enrollees, switching from a silver or gold plan could increase out of pocket expenses for patients with high health care utilization.

“While some consumers may be able to pay less in monthly premium by choosing a bronze plan, they may also have to pay more when they visit a doctor or hospital,” Elizabeth Carpenter, senior vice president at Avalere, said. “Consumers should look not just at premiums during this year’s open enrollment, but also the benefits offered by plans at different metal levels.”

At AMCP Nexus 2017, Melissa Andel, MPP, director of health policy at Applied Policy, explained this phenomenon and noted that the decision to eliminate the CSRs could end up costing the federal government significantly more than funding them.

—David Costill

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